National Skills Fund grilled – MPs ask why it’s a money pit without sufficient oversight

4 Sep 2024

The National Skills Fund, meant to fund skills development in a country where 33.5% of the country is unemployed, appeared before Parliament on Wednesday. What emerged is an entity that not only needs monitoring and support, but also the capacity to perform basic functions such as human resources and IT.

Should the National Skills Fund (NSF) exist if it is not functioning in a way that helps curb the ever-climbing unemployment rate?

That was the key question to emerge from the NSF’s briefing to Parliament’s Higher Education Oversight Committee on Wednesday, 4 September 2024, which left committee members frustrated and concerned.

The NSF made headlines in late 2022 when R5-billion “could not be properly accounted for over two financial years”, according to then higher education minister Blade Nzimande.

Read more: The National Skills Fund, the missing R5bn and Blade Nzimande’s request for confidentiality

The delegation from the Department of Higher Education and Training (DHET) and the NSF was led by Deputy Minister Buti Manamela on Wednesday.

He appeared a day after missing a meeting with Parliament’s public accounts watchdog, which irked the committee members. He stayed only for about three hours after being excused.

Read more: Higher education deputy minister’s no-show sees plug pulled on key student funding meeting in Parliament

Should it exist?

Before presentations could even begin, committee member Mandla Shikwambana (EFF) remarked, “We have serious issues happening on the ground and we have people who seem not to be doing anything.”

Several MPs emphasised the NSF’s intended role in helping young people learn new skills to reduce South Africa’s rampant unemployment. According to StatsSA, the unemployment rate stands at 33.5%.

The committee focused on the need to make the NSF a fully fledged standalone entity, which would allow a board to be appointed and provide better oversight.

Several MPs questioned why the NSF had an accounting officer – the director-general of the DHET – who at the same time was responsible for the agency’s oversight.

As Manamela explained, there was a process under way to look at changing the system – in addition to changing the National Skills Act – which would allow for making the NSF a fully fledged entity.

Committee member Désirée Van Der Walt (DA) questioned the NSF about how it used its budget.

“[The NSF] gets money from somewhere else, to do a very specific job, for a very important role in our country, and [it] can’t do it. If [it] were a private company, [it] would’ve been closed a long time ago… What happened to the money that was meant to skill people?”

“It seems like we have given people millions [but] the day that it’s in the bank, it gets withdrawn and sent to different banks. By the end, there’s no project… None of us around this table would spend our own money this way,” she said.

Karabo Khakhau (DA) said some NSF employees who had been investigated for wrongdoing had been shifted to DHET after they had been cleared.

“People who were found not guilty because there was no evidence, then they got back, but they were sent somewhere else…

“If I am not guilty of misconduct, there is no need for you to remove me from where the question of misconduct was, but you removing me, it is a concession and admission of guilt…

“You conducted an investigation yet there is no evidence that these people were wrong, which means that even the quality of the investigation was compromised,’’ said Khakhau.

Committee members also questioned whether the public could access the NSF and called for it to provide more public information on its role and the location of its offices.

“Even before I came to Parliament, I did not know of this NSF,” said Shikwambana.

Acting NSF chief executive Melissa Erra told the committee the NSF launched its website where information could be accessed only in August 2024. She revealed the entity was still dependent on DHET for functions such as human resources and information and communication technologies.

The committee will soon conduct unannounced visits to the NSF offices, first proposed by Shikwambana.

Criminal investigations and Nexus report

The Directorate for Priority Crime Investigation (Hawks) is investigating several NSF projects. According to the NSF, a dossier of evidence involving 10 projects was compiled by the Hawks in December 2023.

So far, bank statements have been obtained from allegedly implicated companies and individuals. Witness statements have also been taken. An affidavit was also deposed from the NSF. Investigations are still under way.

These 10 projects relate to the Nexus forensic report, instituted by Nzimande after successive disclaimer audit opinions from the Auditor-General in the 2019/20 and 2020/21 financial years.

The Nexus forensic report sampled 10 projects and concluded that six NSF and DHET officials who had been entrusted with tasks including project monitoring, failed to exercise a duty of care and due diligence in accordance with the respective Memoranda of Agreement governing the projects.

The report was finalised in November 2023, but has not been released publicly. It pointed out organisational weaknesses, which should have been addressed.

NSF acting chief executive Erra told the committee that while criminal investigations were still under way, internal labour processes continued.

The committee heard the NSF had attempted to practise consequence management for its staff. Seven NSF officials and three Ekurhuleni West TVET College staff were suspended in October and November 2022 on various charges.

An investigation was conducted which led to two lower-to-middle management officials being cleared of charges and returning to work in July 2023.

The disciplinary processes for two more senior officials are still under way, with one outcome pending and another under legal review. Two more officials’ cases are under review by the legal team. DM

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Should it exist?

Criminal investigations and Nexus report